Down with the overhead pie chart!

Down with the overhead pie chart!

You know what I’m talking about, the pie chart you see on annual reports from nonprofits all the time that show a lot of money going to “programs” and a small slice going to “overhead” and “fundraising.”

I’m not endorsing violence, but if you give me a scissors I will cut this graphic out of your annual report for you.

Stop doing this.

Or even better – don’t start. Why?

These visuals control the way people think about how nonprofits use their funds. A pie chart like this highlights administrative and fundraising costs as OPPOSED to the programming costs. It encourages us to shrink the “overhead” to the smallest possible slice of the pie.

But that’s not how we should be thinking about it.

And as soon as you say less than 100 cents of every dollar goes to programs, donors no longer want your organization to spend money on CRUCIAL infrastructure. The back office does NOT take away from the mission, it makes the mission happen and it safeguards donor resources.

Yes, we want to be wise how we spend our funds. But building a strong, sustainable organization requires a strong administration.

Programs don’t run themselves. Nonprofits are still businesses, and smart investments in core mission support advances the mission. So don’t teach your donors that the ideal nonprofit has 0% of funds going to overhead. Show them how their funds are going towards creating a sustainable organization that makes a real difference in the community.